Daimler

Daimler issues fourth profit warning in a year

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Luxury carmaker Daimler has cut its profit forecast for the fourth time in 13 months, as it set aside more money to cover a regulatory crackdown on diesel emissions and vehicle recalls related to Takata airbags.

The German carmaker is among a number of blue-chip firms to issue a profit warning this week, adding to concerns about the severity of an economic slowdown, particularly in China where confidence has been hit by an ongoing trade war.

The maker of Mercedes-Benz cars said it would post a second-quarter operating loss and that 2019 results would be "significantly" lower than last year, compared with its previous forecast for a broadly unchanged performance.

Daimler shares slip

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This is the fourth warning on profits this year and comes after it cut its profits forecast only last month.

The company listed three factors for the latest revision:

  • New information about the impact of Takata airbags which led to an increaed in provisions of €1bn
  • The cost of the diesel emissions scandal has led to increased costs of €1.6bn
  • A €500m hit from the vans division

It also says there has been lower growth in its markets than expected.

Its shares are down around 1%.

BreakingDaimler warns on profits

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Daimler says it is "adjusting" its outlook for its financial performance and now expects a second-quarter loss of €1.6bn (£1.4bn) compared with €2.6bn of profit a year earlier.

This is "significantly below market expectations" the carmaker says.

Emissions 'collusion'

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The EU competition body has told BMW, Daimler and Volkswagen that, in its preliminary view, they breached EU antitrust rules from 2006 to 2014 by colluding to restrict competition on the development of technology to clean the emissions of petrol and diesel passenger cars.

Commissioner Margrethe Vestager said:"Companies can cooperate in many ways to improve the quality of their products. However, EU competition rules do not allow them to collude on exactly the opposite: not to improve their products, not to compete on quality.

We are concerned that this is what happened in this case and that Daimler, VW and BMW may have broken EU competition rules. As a result, European consumers may have been denied the opportunity to buy cars with the best available technology. The three car manufacturers now have the opportunity to respond to our findings."

The preliminary findings come two years after dawn raids on their premises.

Euro car-makers accelerate on Peugeot-Citreon/Fiat Chrysler tie-up

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Shares in Euro car-makers are on the up this morning on reports that PSA Group and Fiat Chrysler are exploring a partnership to build motors in Europe.

According to Bloomberg, the companies are holding preliminary discussions to collaborate on the development of a super platform.

On German's Dax index, Daimler has motored up 3.79% while Volkswagen is up 2.98%.

BMW is up 1.99%, while in France, Peugeot has climbed 3.04%.

Small-car deal

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Mercedes-Benz owner Daimler is nearing a deal to sell a 50% stake in its small-car brand to China’s Geely, according to the Financial Times.

The move by Geely, which became Daimler’s largest shareholder last year, may be to help out the German group as it struggles to carry the lossmaking Smart brand, the paper reports.

Daimler told the FT the group had been speaking with “several possible co-operation partners” as it worked on the next generation of Smart products.

A spokesman for Geely declined to comment.

Geely slashes its stake in Daimler

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Geely Group, an automobile manufacturer owned by Chinese billionaire Li Shufu, has cut its 9.7% stake in German carmaker Daimler by more than half, sources have told Bloomberg.

In February 2018, Geely Group made a $9bn investment into Mercedes-Benz owner Daimler - the biggest ever overseas acquisition by a Chinese carmaker.

Geely Group already owns Swedish carmaker Volvo and black cab maker London Taxi Company.

At the time, Germany said it would not block the investment, but it warned that the deal should not be used as a "gateway" for Chinese industrial policy interests.